Mukesh, Anil qualify for coal-to-liquid project
New Delhi, August 24
Mukesh Ambani-run Reliance Industries and Anil Ambani's Reliance Infrastructure are the only two companies to have qualified for the $6-8 billion project to convert coal into oil, as per the criteria set by the government.

Anil Ambani’s pay packet fattens to
Rs 13.4 cr
New Delhi, August 24
Consumers may be reeling under an inflation of close to 13 per cent, but it should not be a cause for concern for India's second richest person Anil
Ambani, whose pay package has grown by close to six times over past fiscal.

Burden Sharing
VAT panel’s demand rejected
New Delhi, August 24
The Centre has rejected the demand of states for sharing half of their Rs 8,000-crore burden this fiscal — incurred after they cut sales tax on petroleum products to minimise the impact of the fuel price hike announced by the Union government in June, sources said.

Tatas to cut JLR production: Report
London, August 24
Drop in sales figure has forced the Tata-owned Jaguar Land Rover to cut production of the utility vehicle and redeploy about 300 workers, the British media reported today.

Tollywood actress Swastika Mukherjee displays Swiss 'Romanson' watch at the launch of a showroom in Kolkata on Sunday. — PTI

No plan to privatise BSNL: Scindia
Khandwa (MP), August 24
Denying rumours that BSNL would be privatised, Union minister of state for telecom and IT, Jyotiraditya Scindia has said the public sector telecom major is only thinking of coming out with an IPO and that too with a cap of 10 per cent only.

Tax Advice
No tax on gift received from uncle
Q. I want to know that:1. What is the tax liability against gift tax of Rs 2,00,000/- from Uncle to nephew and who is liable for tax, uncle or nephew?
2. Is Pan Card mandatory for nephew?

Market UpdateVolatility may remain high
A bounce back in the crude oil prices and weak global cues kept the investors on the edge throughout the last week. Rising inflation, back home, kept the pressure on interest rate sensitive sectors like banking, real estate and automobile. The US markets were under pressure on the fears that US mortgage financial giants Fannie Mae and Freddie Mac are on the brink of a government takeover. This continued to stalk investors.

New Delhi, August 24
Mukesh Ambani-run Reliance Industries and Anil Ambani's Reliance Infrastructure are the only two companies to have qualified for the $6-8 billion project to convert coal into oil, as per the criteria set by the government.

Firms run by the two Ambani brothers were the only ones to meet the minimum networth criteria of Rs 4,000 crore and had an agreement with a foreign firm for technology to convert coal into liquid petroleum, sources in the coal ministry said.

Of these, SAIL and JSW did not meet the eligibility criteria of having a collaboration or tie-up with a proven technology provider, while GAIL, GMR and IOC only furnished assurance letters from the technology provider and no documents related to MoU/agreement were provided.

Sources said on preliminary examination of the 22 bids received for the CTL project at Radhikapur coal block, Srirampur block and Ramchandi Promotional coal block in Orissa, seven more companies fulfilled the networth criteria if their parent firms' balance sheets were taken into account.

Sources said an Inter Ministerial Group (IMG) will decide if assurance letters for technology tie-ups and parent company networth would qualify a company for the CTL project.

However, Anil Ambani Group's Reliance Power could not qualify the networth criteria. Others who did not meet this criteria include Solar Industries, Jai Balaji Industries, Shriram Infrastructure and Power, Welspun, Adani, Indiabulls Energy and Bhushan Steel.

New Delhi, August 24
Consumers may be reeling under an inflation of close to 13 per cent, but it should not be a cause for concern for India's second richest person Anil
Ambani, whose pay package has grown by close to six times over past fiscal.

From about Rs 2.4 crore in the year ended March 2007, Ambani's full-year pay surged to Rs 13.4 crore in the latest fiscal from the four listed group companies.

Moreover, the latest year figure does not include his take from Reliance Communications, the flagship entity that accounts for over half of the group's total valuation.

In comparison, his elder brother Mukesh Ambani — possibly the highest-paid business chief in India with an annual package of over Rs 44 crore — got a hike of just about 45 per cent over the past fiscal.

Among the three listed group companies — Reliance Industries, Reliance Petroleum and Reliance Industrial Infrastructure Ltd
—Mukesh gets a remuneration only from the flagship entity RIL.

According to RIL's annual report, Mukesh Ambani got a total payout of Rs 44.02 crore in 2007-08, up from Rs 30.46 crore in 2006-07 and Rs 24.77 crore in the year before that.

In comparison, Anil Ambani got total remuneration of about Rs 13.4 crore in 2007-08 from his four group companies — Reliance Capital, Reliance Infrastructure (formerly Reliance Energy), Reliance Power and Reliance Natural Resources Ltd
(RNRL). The figures for R-Com are not yet available. — PTI

New Delhi, August 24
The Centre has rejected the demand of states for sharing half of their Rs 8,000-crore burden this fiscal — incurred after they cut sales tax on petroleum products to minimise the impact of the fuel price hike announced by the Union government in June, sources said.

The finance ministry did not find merit in the states' demand and hence rejected it, official sources said.

As many as 10 of the total 33 states and Union territories have reduced sales tax on petrol, while 15 have cut the levy on diesel. The decision followed appeal by the Prime Minister Manmohan Singh and others to states to share some burden after prices of petrol, diesel and LPG were hiked in the first week of June.

Empowered Committee of State Finance Ministers on VAT had earlier this month said states would lose close to Rs 8,000 crore this fiscal as they cut sales tax on petrol and diesel and also from the cut in their share of devolution due to the Centre's decision to reduce customs duty and excise tax on petroleum products.

States had asked the Centre to share half of this burden.

However, sources said the estimated losses by states are notional as they are also earning more revenue owing to a rise in prices of petrol, diesel and LPG as the taxes are ad- valorem in nature and fetch more money when prices rise.

The states are computing the losses on the basis of what they could have earned if they did not cut sales tax at the new prices of petrol, diesel and LPG. —
PTI

London, August 24
Drop in sales figure has forced the Tata-owned Jaguar Land Rover to cut production of the utility vehicle and redeploy about 300 workers, the British media reported today.

"Two shifts have been lost at Solihull, the main Land Rover production centre, and three will be cut next month at the Halewood factory on Merseyside, where the Jaguar X-Type is assembled," a report in The Sunday Telegraph said.

JLR has also transferred about 300 staff from Solihull to the Jaguar production line at Castle Broomwich because there is no work for them, the report added.

Due to weakening demand, JLR is reviewing Land Rover production on a monthly basis. Land Rover sales so far have shown only a three per cent fall from 226,000 vehicles last year, but as overall demand dips by 30 per cent in the sectors in which it competes, JLR is being cautious, it added.

Land Rover sales slumped by 31 per cent in the US market in the year to July but strong demand in Russian and Chinese economies almost offset the sharp fall.

Uncertainties about the outlook at Land Rover will slow the recovery in JLR profits. Last year Land Rover accounted for all of JLR's $650 million profits and almost all of the first quarter's $421 million.—
PTI

Khandwa (MP), August 24
Denying rumours that BSNL would be privatised, Union minister of state for telecom and IT, Jyotiraditya Scindia has said the public sector telecom major is only thinking of coming out with an IPO and that too with a cap of 10 per cent only.

"There is no plan to privatise BSNL, but thinking is going on coming out with an IPO with a cap of 10 per cent only," Scindia told reporters here yesterday.

The money generated through an IPO would be used to strengthen the BSNL network in far-flung areas, he said.

He said that there is a gulf between privatisation and IPO and added that to capture investment and market share, IPO is necessary.

"BSNL should focus on providig high-quality service so that it can attract people towards it and also compete with the private players instead of worrying about its future, the minister said.— PTI

1. What is the tax liability against gift tax of Rs 2,00,000/- from Uncle to nephew and who is liable for tax, uncle or nephew?

2. Is Pan Card mandatory for nephew?

3. What is the process of creating gift tax e.g. any writing document, value of writing documents (papers), any attestation, to whom it is to submit, any other formalities, transfer by cheque (in case of local) dd (in case of outstation),

4. Nephew should enter the amount direct in capital a/c.

5. Any other point related to this transaction.

— Amrit Pal Garg

A. (i) Section 56 of the Act provides for the taxability of any some of money exceeding Rs 50,000/- which is received without any consideration by an individual from any person. The section also contains an exception, to the above rule. According to the exception if such an amount is received from brother of the parent of the recipient, the same shall not be taxable under the aforesaid provisions. Accordingly, the gift received by a nephew from his uncle may not involve any tax liability provided the capacity of the donor to give a gift of Rs 2 lakh as well as his identity is proved to the satisfaction of the Assessing Officer. A gift by banking channels may provide a sufficient evidence with regard to the above requirements.

(ii) It will be advisable for the nephew to obtain PAN No.

(iii) The gift by cheque can be made even through a letter. The gift so made should, however, be accepted by the donee in the form of an acceptance letter.

(iv) It would be advisable to deposit the cheque in the account of the recipient and thereafter utilise the same for any purpose.

Wealth tax

Q. What are the assets which are chargeable to wealth-tax as well as the rate of wealth tax?

A. Section (2ea) provides the definition of assets which are chargeable to wealth tax in relation to assessment year commencing on the first day of April 1993 or any subsequent assessment year. The assets includible for the levy of wealth tax are as under:

(a) Any guest house; residential house; commercial property and/or farm house situate within 25 kilometres from the local limits of any municipality or a cantonment board; but excluding:

(1) a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole-time employment, having gross annual salary of less than Rs 5,00,000,

(2) any residential house forming part of stock-in-trade,

(3) any house for commercial purposes (i.e., commercial property) which forms part of stock-in-trade,

(4) any amount which is occupied by the assessee for the purposes of any business or profession carried on by him,

(5) any residential property that has been let-out for a minimum period of 300 days in the previous year, and

(6) any property in the nature of commercial establishments or complexes;

(b) Motor cars, other than those used in assessee's hiring business or used as stock-in trade;

(c) Jewellery, bullion, and furniture, utensils or any other article made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, other than those used as stock-in-trade by the assessee;

(d) Yachts, boats and aircrafts, other than those used by the assessee for commercial purposes;

(e) Urban land, being land situated in any area, within the jurisdiction of a municipality or a cantonment board which has a population of not less than 10,000; or within 8 kilometres from the local limits of such municipality or a cantonment board, as the Central Government may notify except.

(1) land on which construction of a building is not permissible under any law or the land on which building is constructed with the approval of the appropriate authority,

(2) any unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him, and

(3) any land held by the assessee as stock-in-trade for a period of ten years from the date of its acquisition by him;

(f) Cash in hand, in excess of Rs 50,000, of individuals and Hindu undivided families and in the case of other person any amount not recorded in the books of account.

The assets mentioned above are chargeable to wealth tax without any exemption. The other assets such as, shares, debentures, deposits, units, loans advanced, etc., etc. are not liable to wealth-tax.

Deduction against income

Q. I have a commercial flat which I have let out. I have borrowed funds for the acquisition of said flat. I am liable to pay interest of approximately Rs 50,000 per year. Can I claim the deduction of the above amount against the income from the rent received from the letting out of the flat? Am I entitled to any other deduction under the Income-tax Act?

A. (a) Section 24 of the Act provides that where a property has been acquired with the borrowed funds the amount of any interest payable on borrowed funds would be allowed as a deduction against the income from property. Accordingly, you should be entitled to a deduction of Rs 50,000 against annual value of the flat which would be determined on the basis of the rent received by you.

(b) According to the aforesaid section, you are also entitled to a sum equal to 30% of the annual value to cover various other expenses incurred on maintenance, collection charges etc.

HRA deduction

Q. I am a salaried person employed in a private firm. My gross salary amounts to about Rs 2,50,000. I am paying a house rent of Rs 5,000 per month. I am not in receipt of any house rent allowance from my employer. Can I get a deduction of the above amount of Rs 5,000 towards the house rent paid?

A. An assessee is allowed deduction for the amount paid toward the house rent provided the following conditions are satisfied:

(a) The rent paid is in excess of 10% of his total income before allowing any deduction under this section.

(b) The rent paid is in respect of accommodation occupied for the purposes of his inheritance for which a declaration in form 10BA is filed.

(c) The deduction would be allowable only in case where any residential accommodation is not owned by the assessee or by his spouse or his minor child.

(d) The assessee is not entitled to any house rent allowance.

The deduction is restricted to 25% of the total income or Rs 2,000 whichever is less.

Presuming that you comply with the above requirements and your total income is Rs 2,50,000 only, the deduction allowable to you will have to be worked out as under:
Rent paid in excess of 10% = 60,000-25,000=35,000

A bounce back in the crude oil prices and weak global cues kept the investors on the edge throughout the last week. Rising inflation, back home, kept the pressure on interest rate sensitive sectors like banking, real estate and automobile. The US markets were under pressure on the fears that US mortgage financial giants Fannie Mae and Freddie Mac are on the brink of a government takeover. This continued to stalk investors.

The Sensex lost over two per cent to close at 14,401 whereas Nifty lost 103 points to close at 4,327 last week.

Going forward, the markets may stay under pressure as there is increasing likelihood that the RBI raising the interest rates again in the backdrop of inflation hitting 12.63 per cent, which is a 16-year high. Markets will also be looking towards global cues for direction, but this week volatility may remain high on the impending derivative expiry. Market will also closely watch developments on the Indo-US nuclear deal. A green signal by the NSG is required for the deal to proceed to the US Congress for final ratification.

Indian Hotels

IHCL, a Tata group company set up in the early 20th century, is a leading player in the Indian hospitality industry. Its hotels are spread across the country with more than 8,000 rooms under its management across 51 hotels in India and 12 hotels in eight other countries.

The Indian hotel industry is witnessing steady growth in both domestic and foreign tourist arrivals. The foreign tourist arrivals grew by 12 per cent during the first five months of 2008 to reach 2.3 million as against 2.1 million during the corresponding period last year.

Indian Hotels Company offers the most diversified play on domestic tourism industry with presence in major leisure and business destinations as well as offerings in both luxury and mid market segments. The company has chalked out healthy expansion plans which would add about 2,500 rooms on a consolidated basis over the next three years. However, we believe Average Room Rates (ARRs) could dampen gains from volume expansion as major cities like Mumbai and Delhi would see only a moderate tariff growth while Bangalore is expected to witness decline in room rentals from 2009.

Investors with a three-year perspective may check into this bellwether at the current market price of Rs 77 for decent returns.